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When Patrick Naef took the stage, he also began with characteristic modesty. “After all this AI stuff,” he joked, “I looked at my slides this morning and thought, this feels more like archaeology.” The audience laughed, but his message soon proved timeless.
When it comes to leading an organization successfully through the required transformation, the audience was reasonable modest about their confidence in their ability. Answering the question “In leading my organization into the age of Agentic AI, I am seen as:” gave the following result:
- 10% A visionary, they fully trust me
- 34% A solid leader, most are on board
- 45% A work-in-progress, some have doubts
- 10% A risk factor, even I question myself
Naef, the former CIO of Emirates Group and author of The Technology Illusion, is a man who’s led one of the most complex digital transformations in aviation. His goal today was not to glorify technology—but to expose its myths, to remind us that digital transformation is first and foremost a human challenge. “I’m not a scientist or professor,” he said, “just a simple engineer who’s made a lot of mistakes. And perhaps learned a few things along the way.”
From “IT Doesn’t Matter” to “Everything Is IT”
Naef began by recalling the famous 2003 Harvard Business Review article “IT Doesn’t Matter” by Nicholas Carr, which argued that information technology had become a mere commodity. “At the time,” Naef smiled, “many CEOs were delighted — they thought they could outsource IT and never worry about it again.” But, he noted, “those same companies later discovered they had outsourced their brains.” The world has changed dramatically: half of the Fortune 500 companies from the year 2000 no longer exist — “many because they didn’t embrace technology fast enough.”
To make his point, Naef turned historian. “The Wright brothers flew their first powered airplane in 1903,” he said. “Do you know how long it took before commercial aviation began?
Just ten years. Ten years to create an entirely new industry. So, when people tell me AI will take decades to change things — I smile. We’ve seen this movie before.”
When Digitalization Isn’t Transformation
One of Naef’s main missions is to untangle two words everyone confuses: digitalization and digital transformation. “Digitalization,” he explained, “is when you use technology to automate or improve existing processes. You’re simply digitalizing the past.” By contrast, “digital transformation means using technology to create new business models, new markets, new ways of operating. It’s transformative by definition.” He illustrated the difference with a humorous story. “I read an article about a hotel chain claiming they’d achieved digital transformation,” he said. “They had a new website, a CRM, even humanoid robots at reception. Coincidentally, I stayed in one of their hotels that very evening.” The audience laughed—knowing what was coming. “I had to queue at reception, fill in a paper form, hand over my credit card, and the friendly lady gave me the wrong room. A smoker’s room, even though I’m a non-smoker and a loyalty member.” He shrugged. “So yes, they had robots. But they hadn’t transformed anything. Real transformation would have used my data to check me in automatically, assign my room when my flight landed, and use my phone as the key. The technology exists. The mindset doesn’t.”
The Four Stages of Digital Maturity
Naef described four stages companies typically go through — “not five,” he grinned, “because I like things simple.”
- Digital Cosmetics – Technology for marketing buzz. “Lots of talk, little impact.”
- Digital Silos – Successful automation within departments, but no integration. “You get islands of excellence separated by oceans of Excel.”
- Digital Business Models – Companies like Uber and Airbnb that connect producers and consumers without owning assets. “They scale exponentially because they don’t carry the baggage of traditional operations.”
- Hybrid Models – The future, combining the digital and the physical. “Even digital-born companies are investing in real assets now,” he noted. “Because nothing beats the personal touch. The sweet spot is the mix.”
His advice: “Don’t just digitalize your silos. Look across the whole experience—and beyond your current industry boundaries.”
The Dematerialization of Everything
Naef’s stories are at once practical and poetic. He described a moment of revelation when
looking at his wife’s hyper-organized holiday checklists. “Ten years ago, our packing list had cameras, alarm clocks, books, maps, film rolls…” he smiled. “Today, all of that fits in our smartphone.”
This, he explained, is the virtualization of things—the process by which physical objects become digital. “A boarding pass, an alarm clock, a camera—they’re all just containers of information that can be virtualized. And they can talk to each other.” His insight: if every object that acquires, stores, manipulates, or displays data can become virtual, then “digital transformation” isn’t about process automation—it’s about re-imagining reality.
IT as the Product
Drawing on his years at Emirates, Naef described how technology shifted from a backoffice tool to a strategic differentiator. “Fifteen years ago, passengers rated airlines on seat comfort and meals. IT played no role in that,” he said. “Today, technology is the product. From the app you book on, to the entertainment system, to the Wi-Fi in the air it defines your experience.”
He gave a similar example from Franke, a Swiss company making coffee machines. “Fifteen years ago, those machines were mechanical beasts. Now they’re smart, connected, full of sensors streaming data for predictive maintenance.”
In short: “Technology is no longer a support function. It’s a strategic component of value creation.”
Beware the Outsourcing Trap
Naef warned that many firms had followed the “IT doesn’t matter” mantra too literally and now regretted it. “They outsourced too much, lost their skills, and became dependent on vendors. Now, when technology becomes the core of their product, they realize they’ve hollowed themselves out.”
“Outsourcing is easy,” he said. “In-sourcing is painful.” His advice: rebuild capabilities before it’s too late.
Rethinking the Org Chart
Holding up a slide, Naef asked the audience to guess the year of the diagram—a classic pyramid structure with boxes for Sales, HR, IT, etc. The guesses ranged from 1950 to 1980. “Wrong,” he said. “It’s from 1902. The U.S. Rubber Company.”
That structure, he argued, predates airplanes, computers, and the internet—yet it still defines how most companies are run. “We live in a network economy,” he said, “but we manage it with military hierarchies.” Naef advocates for networked organizations—more fluid, connected, responsive. “In a network, if one communication path fails, the information finds another way. That’s how companies need to work today.”
He smiled: “Don’t throw hierarchies overboard— but mix them with networks. It’s not either-or, it’s and.”
The Next Generation: From Knowledge Is Power to Sharing Is Power
Naef lightened the tone with a story about his daughter. “When I did homework, I kept my answers secret,” he said. “Knowledge was power. My daughter uploads hers to social media so her classmates can improve it. They crowdsource their homework!” His point: younger generations live by a new paradigm— the more you share, the more you gain.
“Nobody,” he said, “is smarter than a network.” He chuckled. “Maybe a few CEOs I know should think about that.”
A Final Thought on AI
Although he began by saying he wouldn’t talk about AI, Naef couldn’t resist closing on it. Citing Yuval Noah Harari, he reminded the audience that humans rule the planet because we can collaborate and learn collectively. “If AI can now scale infinitely, share knowledge instantly, and learn collectively,” he said, “then we humans have competition.”
He paused. “We’re not great at learning from each other’s mistakes—we insist on repeating them. AI doesn’t.” Then, with a half-smile: “So who will rule the world? I don’t have the answer. But I do know we’d better start learning faster.”
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Please note – This report was created by almost exclusively using available AI-tools except for minor editorial tweaks and some limited lay-out changes.